What financial statements must a Buona franchisee submit to the franchisor?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
submit to Franchisor, with each Period Statement or Quarterly Statement, copies of any state or local sales tax returns filed by Franchisee for the period included in the Period Statement or Quarterly Statement.
4.4 Financial Statements. Franchisee shall, at its expense, submit to Franchisor during the Term of this Agreement, unaudited financial statements for the preceding Period and for the preceding fiscal year ("Financial Statements"), together with a certificate executed by Franchisee certifying that such financial statement, as applicable, is true and accurate and such other information in such form as Franchisor may reasonably require. The foregoing Financial Statements shall include both a profit and loss statement and a balance sheet, and shall be prepared in accordance with generally accepted accounting principles. Franchisee must furnish Franchisor with any additional financial statements and any tax returns for the Franchised Business within fifteen (15) days after Franchisee's receipt of Franchisor's written request for the information. In the event Franchisee defaults under this Agreement, Franchisor may require, upon written notice to Franchisee, that all Financial Statements submitted thereafter include a "Review Report" prepared by an independent Certified Public Accountant (CPA).
4.5 Other Reports; Reporting Requirements. Franchisee shall also submit to Franchisor, for review or auditing, such other forms, financial statements, reports, records, information and data as Franchisor may reasonably designate, in the form and in the manner and at the times and places reasonably required by Franchisor, upon request and as specified from time to time in the Manuals or otherwise in writing. If Franchisee has combined or consolidated financial information relating to the Franchised Business with that of any other business or businesses, including a business licensed by Franchisor, Franchisee shall simultaneously submit to Franchisor, for review or auditing, the forms, reports, records and financial statements (including but not limited to the Period, Quarterly and annual Financial Statements) which contain the detailed financial information relating to the Franchised Business, separate and apart from the financial information of such other businesses. Franchisor may from time to time change the form, manner and times relating to submission of Period Statements, Quarterly Statements, Financial Statements and/or other reports as specified in the Manual or otherwise in writing
4.6 Equipment. Franchisee shall record all sales on point-of-sale equipment as required by the Manuals or as otherwise approved in writing by Franchisor.
4.7 Franchisor's Right to Audit. Franchisor or its designated agents or auditors shall have the right at all reasonable times to audit, review and examine by any means, including electronically through the use of telecommunications devices or otherwise, at its expense, the books, records, accounts and tax returns of Franchisee. If any such audit, review or examination reveals that Gross Sales have been understated in any report to Franchisor, Franchisee shall immediately pay to Franchisor the royalty fee and Marketing Fund Contribution due with respect to the amount understated, in addition to the Late Payment Charge.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are required to submit several financial statements to the franchisor. During the term of the agreement, franchisees must submit unaudited financial statements for the preceding period and fiscal year. These Financial Statements must include both a profit and loss statement and a balance sheet, prepared according to generally accepted accounting principles. These statements must be certified as true and accurate by the franchisee.
In addition to the annual financial statements, Buona franchisees must also submit Period Statements within 21 days after each of the thirteen 4-week reporting periods, and Quarterly Statements within 21 days of each fiscal quarter. These statements should provide sales and other financial data in the format required by Buona, and must also be certified as true and accurate. Franchisees must also provide copies of any state or local sales tax returns filed for the period if requested by Buona.
Buona also has the right to request additional financial statements and tax returns within 15 days of a written request. Furthermore, if a franchisee defaults on the agreement, Buona may require that all future financial statements include a "Review Report" prepared by an independent Certified Public Accountant (CPA). Buona also retains the right to audit the franchisee's books, records, accounts, and tax returns at any reasonable time. Franchisees are also required to use a designated accounting service for the first 12 months of operation, and may be required to use the designated service again if they are not in full compliance with reporting requirements.